Western Sierra acquisition accretive for quarter
PORTLAND, Ore., July 20 /PRNewswire-FirstCall/ -- Umpqua Holdings Corporation (NASDAQ:UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced second quarter 2006 operating earnings of $20.6 million, or $0.42 per diluted share, compared to $16.1 million, or $0.36 per diluted share, for the second quarter of 2005, an increase of 17% per diluted share. For the year to date, operating earnings were $38.2 million, or $0.81 per diluted share, compared to $31.2 million, or $0.69 per diluted share for the same period a year ago, also an increase of 17% per diluted share. Operating earnings excludes merger related expense, net of tax.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030917/SFW078LOGO ) Including merger expense, net income for the second quarter of 2006 was $19.6 million, or $0.40 per diluted share, compared to $16.0 million, or $0.36 per diluted share for the second quarter of 2005. For the year to date, net income was $37.1 million, or $0.79 per diluted share, compared to $31.0 million, or $0.69 per diluted share for the same period of the prior year.
(Dollars in
thousands,
except per Quarter ended: Six months ended:
share data) 6/30/2006 3/31/2006 6/30/2005 6/30/2006 6/30/2005 Net Income $19,631 $17,427 $16,006 $37,058 $31,025
Add Back: Merger
related expenses,
net of tax 994 151 97 1,144 157
Operating Earnings $20,625 $17,578 $16,103 $38,202 $31,182 Earnings per diluted
share:
Net Income $0.40 $0.39 $0.36 $0.79 $0.69
Operating Earnings $0.42 $0.39 $0.36 $0.81 $0.69 The Company completed the acquisition of Western Sierra Bancorp on June 2, 2006, in an all stock exchange valued at approximately $354 million. Approximately 12.7 million shares of common stock were issued in connection with the acquisition. This acquisition was accretive to operating earnings by $0.01 per diluted share during the second quarter, based mainly on accelerated synergy realization. Full system integration was completed successfully over the July 15th weekend.
"With these stores now under the Umpqua brand, all associates immersed in the Umpqua culture, and our marketing efforts now launched in one of the fastest growing markets in the country, we remain well positioned to sustain our organic growth," said Ray Davis, president and chief executive officer of Umpqua Holdings Corporation.
Total consolidated assets as of June 30, 2006 were $7.2 billion, compared to $5.0 billion a year ago. Total gross loans and leases, and deposits, were $5.3 billion and $5.5 billion, respectively, as of June 30, 2006, compared to $3.6 billion and $4.0 billion, respectively, a year ago.
The following table presents the year-to-date annualized organic growth rates, which exclude the effects of the Western Sierra Bancorp acquisition: (in thousands) Loans Deposits Assets
As reported, 6/30/06 $5,309,078 $5,464,770 $7,178,392
less: 12/31/05 balances 3,921,631 4,286,266 5,360,639
Total growth year to date $1,387,447 $1,178,504 $1,817,753 less: acquisition 1,022,231 1,016,053 1,491,466
Organic growth $365,216 $162,451 $326,287 Annualized organic growth rate 19% 8% 12% During the second quarter of 2006, the Company had net charge-offs of $0.1 million, or 0.01% of average loans and leases on an annualized basis. Non- performing loans and leases were $7.3 million at June 30, 2006, representing only 0.14% of total loans and leases. This represents a decline from 0.19% in non-performing loans and leases on a sequential quarter basis before the acquisition of Western Sierra Bancorp. Based on the quality of the loan portfolio and net recoveries for the year to date, there was no substantial provision for credit losses during the second quarter of 2006, compared to $1.4 million for the same period a year ago. The allowance for credit losses was 1.14% of total loans and leases at June 30, 2006.
Umpqua Bank, Umpqua Holdings' Bank subsidiary, reported a net interest margin of 4.93% for the second quarter of 2006, compared to 4.95% for first quarter of 2006 and 5.05% for the same quarter a year ago. The decline in margin resulted from increases in short-term market interest rates, which led to an increase in deposit and borrowing costs. The yield on earning assets increased 26 basis points on a sequential quarter basis to 7.22%, while the cost of interest bearing liabilities increased 33 basis points to 3.27%.
Excluding merger expense, the Bank efficiency ratio was 51.8% for the second quarter of 2006, compared to 52.7% for the same period a year ago.
As of June 30, 2006, total shareholders' equity was $1.1 billion, and tangible book value per share was $7.46. As previously announced, the Company paid a quarterly cash dividend of $0.12 per share on July 14, 2006.
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including those set forth from time to time in Umpqua's and Western Sierra's filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Specific risks in this press release include whether the company can sustain its rate of organic growth.
Non-GAAP Financial Measures In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Umpqua believes that providing non-GAAP financial measures provides investors with information useful in understanding Umpqua's financial performance. Umpqua provides measures based on "operating earnings," which exclude merger-related expenses. Operating earnings per diluted share is calculated by dividing operating earnings by the same diluted share total used in determining diluted earnings per share.
A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables or where the non-GAAP measure is presented.
About Umpqua Holdings Corporation Umpqua Holdings Corporation is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has 127 locations stretching from the greater Sacramento area and San Joaquin Valley to Seattle, Wash., as well as along the Oregon and Northern California Coast and in Central Oregon. Umpqua Holdings also owns a retail brokerage subsidiary, Strand, Atkinson, Williams & York, Inc., which has locations in Umpqua Bank stores and in dedicated offices throughout Oregon and Southwest Washington. Umpqua Bank's Private Client Services Division provides tailored financial services and products to individual customers. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit http://www.umpquaholdingscorp.com/.
Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, July 20, 2006, at 10:00 a.m. PDT (1:00 p.m. EDT) during which the Company will discuss second quarter results and provide an update on recent activities, including the Company's recent acquisition of Western Sierra Bancorp. There will be a question-and-answer session following the presentation. Shareholders, analysts and other interested parties are invited to join the call by dialing 888-577-8991 a few minutes before 10:00 a.m. The password is "UMPQUA." Information to be discussed in the teleconference will be available on the Company's website prior to the call at http://www.umpquaholdingscorp.com/. A rebroadcast can be found approximately one hour after the conference call by dialing 866-415-3311, or by visiting that website.
Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited) Dollars in thousands, except Quarter Ended:
per share data June 30, March 31, June 30,
2006 2006 2005 Interest income
Loans and leases $86,004 $73,120 $60,220
Investments - taxable 6,693 6,711 6,252
Investments - tax exempt 836 722 699
Other interest 354 149 454
Dividends 56 44 38
Total interest income 93,943 80,746 67,663 Interest expense
Deposits 25,953 21,038 13,485
Repurchase agreements and fed funds
purchased 1,802 2,389 407
Trust preferred securities 3,376 3,012 2,550
Other borrowings 2,055 28 139
Total interest expense 33,186 26,467 16,581
Net interest income 60,757 54,279 51,082
Provision for loan losses 54 21 1,400
Non-interest income
Service charges 6,450 5,484 5,426
Brokerage fees 2,534 2,368 2,879
Mortgage banking revenue 2,503 1,844 228
Gain (loss) on sale of securities (1) -- 1,398
Other income 2,320 2,506 1,993
Total non-interest income 13,806 12,202 11,924 Non-interest expense
Salaries and benefits 23,337 21,801 20,361
Occupancy and equipment 7,199 7,168 6,109
Other 11,051 9,760 9,790
Merger related expenses 1,656 251 161 Total non-interest expense 43,243 38,980 36,421 Income before income taxes 31,266 27,480 25,185
Provision for income tax 11,635 10,053 9,179 Net income $19,631 $17,427 $16,006 Weighted average shares outstanding 48,528,525 44,658,423 44,436,323
Weighted average diluted shares
outstanding 48,994,482 45,029,063 44,988,322 Earnings per share - Basic $0.40 $0.39 $0.36
Earnings per share - Diluted $0.40 $0.39 $0.36
Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited) Six Months Ended:
June 30, June 30,
Dollars in thousands, except per share data 2006 2005 Interest income
Loans and leases $159,124 $117,156
Investments - taxable 13,404 12,801
Investments - tax exempt 1,558 1,412
Other interest 503 687
Dividends 100 81
Total interest income 174,689 132,137
Interest expense
Deposits 46,991 24,809
Repurchase agreements and fed funds purchased 4,191 908
Trust preferred securities 6,388 4,944
Other borrowings 2,083 544
Total interest expense 59,653 31,205
Net interest income 115,036 100,932
Provision for loan losses 75 2,400
Non-interest income
Service charges 11,934 10,248
Brokerage fees 4,902 6,008
Mortgage banking revenue 4,347 1,578
Gain (loss) on sale of securities (1) 1,398
Other income 4,826 3,294
Total non-interest income 26,008 22,526
Non-interest expense
Salaries and benefits 45,138 40,640
Occupancy and equipment 14,367 12,242
Other 20,811 18,712
Merger related expenses 1,907 262
Total noninterest expense 82,223 71,856
Income before income taxes 58,746 49,202
Provision for income tax 21,688 18,177
Net income $37,058 $31,025 Weighted average shares outstanding 46,604,165 44,383,766
Weighted average diluted shares outstanding 47,111,951 44,972,170 Earnings per share - Basic $0.80 $0.70
Earnings per share - Diluted $0.79 $0.69
Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited) Dollars in thousands, except
per share data June 30, March 31, June 30,
2006 2006 2005 Assets:
Cash and cash equivalents $238,964 $122,470 $200,748
Trading account securities 376 372 1,403
Investments available for sale 692,910 648,487 571,895
Investments held to maturity 9,676 7,633 11,735
Loans held for sale 18,760 11,760 20,301
Loans and leases 5,309,078 4,096,194 3,612,004
Less: Allowance for loan losses (58,516) (44,546) (44,510)
Loans and leases, net 5,250,562 4,051,648 3,567,494
Restricted equity securities 20,538 14,264 14,298
Premises and equipment, net 100,040 88,857 88,321
Other real estate owned 69 69 213
Mortgage servicing rights, net 11,550 11,203 9,268
Goodwill and other intangibles 682,789 408,156 407,072
Other assets 152,158 110,925 145,867
Total assets $7,178,392 $5,475,844 $5,038,615 Liabilities:
Deposits $5,464,770 $4,229,648 $3,972,920
Securities sold under agreements
to repurchase and fed funds
purchased 261,720 272,990 127,449
Borrowings 57,081 3,111 13,296
Notes payable for Trust preferred
securities 204,222 165,643 165,970
Other liabilities 77,499 53,670 44,243
Total liabilities 6,065,292 4,725,062 4,323,878 Shareholders' equity:
Common stock 923,309 567,369 563,582
Retained earnings 208,335 195,639 153,794
Accumulated other comprehensive
loss (18,544) (12,226) (2,639)
Total shareholders' equity 1,113,100 750,782 714,737
Total liabilities and shareholders'
equity $7,178,392 $5,475,844 $5,038,615 Common shares outstanding at period
end 57,651,533 44,721,027 44,453,407
Book value per share $19.31 $16.79 $16.08
Tangible book value per share $7.46 $7.66 $6.92
Tangible equity $430,311 $342,626 $307,665
Umpqua Holdings Corporation
Loan Portfolio
(Unaudited) Dollars in thousands June 30, March 31, June 30,
2006 2006 2005 Loans and leases by purpose:
Commercial real estate $2,959,739 $2,225,533 $1,975,218
Residential real estate 220,140 216,740 217,245
Construction 1,012,303 712,454 503,599
Total real estate 4,192,182 3,154,727 2,696,062
Commercial 1,047,477 877,102 837,702
Leases 18,192 16,959 16,887
Consumer 48,997 46,593 59,571
Other 2,230 813 1,782
Total loans and leases $5,309,078 $4,096,194 $3,612,004 Quarter Quarter Quarter
Ended Ended Ended
June 30, March 31, June 30,
Dollars in thousands 2006 2006 2005 Allowance for credit losses
Balance beginning of period $44,546 $43,885 $45,360
Provision for credit losses 54 21 1,400
Acquisition 14,043 -- -- Charge-offs (947) (613) (3,239)
Less recoveries 820 1,253 989
Net recoveries (127) 640 (2,250) Total Allowance for loan losses 58,516 44,546 44,510 Reserve for unfunded commitments 2,145 1,642 1,354
Total Allowance for credit losses $60,661 $46,188 $45,864 Net charge-off's (recoveries) to average
loans and leases (annualized) 0.01% (0.06)% 0.25%
Recoveries to gross charge-offs 87% 204% 31%
Allowance for credit losses to loans
and leases 1.14% 1.13% 1.27%
Allowance for credit losses to
nonperforming loans and leases 828% 592% 223%
Nonperforming loans and leases to total
loans and leases 0.14% 0.19% 0.57% Nonperforming assets:
Nonperforming loans and leases $7,330 $7,796 $20,606
Real estate owned 69 69 213
Total nonperforming assets $7,399 $7,865 $20,819
Umpqua Holdings Corporation
Loan Portfolio
(Unaudited) Six Months Six Months
Ended Ended
June 30, June 30,
Dollars in thousands 2006 2005 Allowance for credit losses
Balance beginning of period $43,885 $44,229
Provision for credit losses 75 2,400
Acquisitions 14,043 -- Charge-offs (1,560) (3,851)
Less recoveries 2,073 1,732
Net charge-offs 513 (2,119) Total Allowance for loan losses 58,516 44,510 Reserve for unfunded commitments 2,145 1,354
Total Allowance for credit losses $60,661 $45,864 Net (recoveries) charge-offs to average loans and
leases (0.02)% 0.12% Recoveries to gross charge-offs 133% 45%
Deposits by Type
(Unaudited) June 30, March 31, June 30,
2006 2006 2005 Dollars in
thousands Amount Mix Amount Mix Amount Mix Demand, non
interest-
bearing $1,264,249 23.1% $990,803 23.4% $977,160 24.6%
Demand,
interest-
bearing 2,198,838 40.3% 1,768,347 41.8% 1,562,189 39.3%
Savings 421,248 7.7% 355,280 8.4% 445,319 11.2%
Time 1,580,435 28.9% 1,115,218 26.4% 988,252 24.9%
Total
Deposits $5,464,770 100.0% $4,229,648 100.0% $3,972,920 100.0%
Umpqua Holdings Corporation
Selected Ratios
(Unaudited) Quarter Ended:
June 30, March 31, June 30,
2006 2006 2005 Net Interest Spread:
Yield on loans and leases 7.63% 7.37% 6.76%
Yield on taxable investments 4.53% 4.44% 4.27%
Yield on tax-exempt investments(1) 5.56% 5.59% 6.59%
Yield on temporary investments 4.13% 4.28% 2.76%
Total yield on earning assets(1) 7.22% 6.96% 6.36% Cost of interest-bearing deposits 2.93% 2.63% 1.80%
Cost of securities sold under agreements
to repurchase and fed funds purchased 4.09% 4.14% 2.26%
Cost of borrowings 5.04% 3.62% 2.06%
Cost of trust preferred securities 7.63% 7.37% 6.16%
Total cost of interest bearing
liabilities 3.27% 2.94% 2.03% Net interest spread(1) 3.95% 4.02% 4.33%
Net interest margin (1) 4.68% 4.69% 4.81% Excluding merger related expense(2):
Return on average assets 1.37% 1.32% 1.30%
Return on average tangible assets 1.49% 1.42% 1.41%
Return on average equity 9.64% 9.58% 9.17%
Return on average tangible equity 22.24% 21.22% 21.74% As reported:
Return on average assets 1.31% 1.31% 1.29%
Return on average tangible assets 1.42% 1.41% 1.40%
Return on average equity 9.18% 9.50% 9.11%
Return on average tangible equity 21.17% 21.04% 21.61% Bank Only Ratios:
Umpqua Bank efficiency ratio(2) 51.78% 53.59% 52.71%
Umpqua Bank net interest margin(1) 4.93% 4.95% 5.05% (1) Tax exempt interest has been adjusted to a taxable equivalent basis
using a 35% tax rate. (2) Excludes merger related expense, net of tax. Umpqua Holdings Corporation
Selected Ratios
(Unaudited) Six Months Ended:
June 30, June 30,
2006 2005 Net Interest Spread:
Yield on loans and leases 7.51% 6.69%
Yield on taxable investments 4.49% 4.25%
Yield on tax-exempt investments(1) 5.57% 6.53%
Yield on temporary investments 4.17% 2.66%
Total yield on earning assets(1) 7.10% 6.30% Cost of interest-bearing deposits 2.79% 1.69%
Cost of securities sold under agreements to
repurchase and fed funds purchased 4.12% 2.30%
Cost of borrowings 5.02% 2.01%
Cost of trust preferred securities 7.51% 6.00%
Total cost of interest bearing liabilities 3.12% 1.92% Net interest spread(1) 3.98% 4.38%
Net interest margin(1) 4.69% 4.82% Excluding merger related expense(2):
Return on average assets 1.35% 1.27%
Return on average tangible assets 1.46% 1.39%
Return on average equity 9.61% 9.00%
Return on average tangible equity 21.76% 21.59% As reported:
Return on average assets 1.31% 1.27%
Return on average tangible assets 1.42% 1.38%
Return on average equity 9.32% 8.95%
Return on average tangible equity 21.10% 21.48% Bank Only Ratios:
Umpqua Bank efficiency ratio(2) 52.64% 53.15%
Umpqua Bank net interest margin(1) 4.94% 5.05% (1) Tax exempt interest has been adjusted to a taxable equivalent basis
using a 35% tax rate. (2) Excludes merger related expense, net of tax. Umpqua Holdings Corporation
Average Balances
(Unaudited) Quarter Ended:
June 30, March 31, June 30,
Dollars in thousands 2006 2006 2005 Loans held for sale $14,619 $9,551 $15,463
Loans and leases 4,505,246 4,015,579 3,555,336
Earning assets 5,236,760 4,721,904 4,286,972
Goodwill & other intangibles 486,167 408,212 407,364
Total assets 6,030,752 5,411,419 4,980,367 Non interest bearing demand deposits 1,048,201 968,506 949,610
Interest bearing deposits 3,547,093 3,243,784 3,008,406
Total deposits 4,595,294 4,212,290 3,958,016
Interest bearing liabilities 4,064,871 3,646,484 3,273,642 Total shareholders' equity 858,168 744,190 704,466
Tangible equity 372,001 335,978 297,102
Umpqua Holdings Corporation
Average Balances
(Unaudited) Six Months Ended:
June 30, June 30,
Dollars in thousands 2006 2005 Loans held for sale $12,099 $14,604
Loans and leases 4,261,765 3,515,475
Earning assets 4,980,754 4,251,650
Goodwill & other intangibles 447,405 407,760
Total assets 5,722,796 4,944,583 Non interest bearing demand deposits 1,008,573 922,414
Interest bearing deposits 3,396,277 2,968,383
Total deposits 4,404,850 3,890,797
Interest bearing liabilities 3,856,833 3,268,976 Total shareholders' equity 801,494 699,039
Tangible equity 354,089 291,279
Umpqua Holdings Corporation
Mortgage Banking Statistical Analysis
(unaudited) Quarter Ended:
June 30, March 31, June 30,
2006 2006 2005 Dollars in thousands Mortgage Servicing Rights (MSR):
Mortgage loans serviced for others $1,004,148 $1,014,680 $1,026,088 MSR Asset (gross) $13,735 $13,610 $12,455
Less: Valuation reserve (2,185) (2,407) (3,187)
MSR Asset (net of reserve) $11,550 $11,203 $9,268 MSR as % of serviced portfolio 1.15% 1.10% 0.90% Dollars in thousands, except per
share data
Mortgage Banking Revenue:
Origination and sale $1,937 $1,523 $2,156
Servicing 344 354 183
MSR valuation reserve change 222 (33) (2,111)
Total Mortgage Banking Revenue $2,503 $1,844 $228
Six Months Ended:
June 30, June 30,
2006 2005 Dollars in thousands Mortgage Banking Revenue:
Origination and sale $3,460 $3,553
Servicing 698 420
MSR valuation reserve change 189 (2,395)
Total Mortgage Banking Revenue $4,347 $1,578
http://www.newscom.com/cgi-bin/prnh/20030917/SFW078LOGO http://photoarchive.ap.org/ DATASOURCE: Umpqua Holdings Corp.
CONTACT: Ray Davis, President/CEO, +1-503-727-4101 or , or Dan Sullivan, EVP/CFO, +1-503-727-4103 or , both of Umpqua Holdings Corporation Web site: http://www.umpquaholdingscorp.com/
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